Coins, wine, art, antiques, gold, stamps, classic cars and jewellery – there seems to be an endless array of investment opportunities these days. However, with volatile markets and fickle collectors, not forgetting the tax man needing his dues, we still believe in good old-fashioned bricks and mortar in which to invest our hard-earned dollars – and no doubt, so do the 23 people who, thanks to their real estate holdings, joined the FORBES Billionaires List in 2015. The total number of real estate tycoons on the list is now 157.
While realistically most property investors won’t be joining the FORBES rich list, many still enjoy a comfortable lifestyle and financial peace of mind thanks to their property investment choices.
Here are some reasons why we believe property is still a good investment opportunity:
Easy to understand
First and foremost, investing in property is relatively easy to understand. You do your sums, get a mortgage, buy a property and get the tenants in. Yes, there is a bit of hard work and sometimes a few obstacles to overcome, but once you’ve got it up and running, generally an investment property ticks over quite nicely.
Compare this to other investments such as investing in shares. It takes a lot of time to trawl through company reports and constantly check the financial press. There is also a lot of terminology to get to grips with and several variables to consider when looking at the risks.
Stable and predictable
The recent crash in China wiped millions off some shares here in Australia and many who invested in Dick Smiths and Woolworths’ Masters stores probably didn’t foresee them shutting the doors quite so soon. While stocks and shares do offer some good returns, you do need to constantly keep your eye on the market. The antiques and collectables market can also be unpredictable; a collector’s item can fall to the bottom of the list if you’re not aware of trends.
Property on the other hand is a relatively stable market. Everyone needs a place to live and Australia’s population is increasing. In 2013, 4.5 million Australians lived in private rental accommodation – about 1.8 million households, or 23.4 per cent of households. As this figure is expected to grow, there’s probably not going to be a lack of tenants in the future.
Provide an income
Depending on how you set up your property investment, many investors enjoy an income as well as watch some capital growth on their asset. Furthermore, this rental income may increase over time as the economy grows.
Tax deductible benefits
Unlike some other forms of investment, property investment comes with tax-deductible benefits. Property management, maintenance, insurance – they can all be claimed back when you do your tax return. A good accountant can help you legally cut other tax expenses through your investment property.
Tenants pay for your investment
Someone else is paying off the mortgage on your asset – you can’t get much better than that.
Someone else does the hard work
Managing a property needn’t be hard. If you get a good property manager (which is a tax deductible benefit too), all you have to do is to sit back and let them do the hard work of finding tenants and sorting any maintenance issues. This means you can spend your free time doing the things you want to do rather than the things you have to do.
If you’d like to learn more about what to look for when buying an investment property, or would like information about buying, selling or renting property, please get in touch. Our team would love to help you with your real estate needs.
When considering buying an investment property, we always recommend you speak to a financial specialist.